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SIPPs dominate pension transfers as volumes keep rising

11 January 2018

Latest data from Origo via its Options Transfers service, reveals the volume and value of pension transfers have increased for yet another year, with money in to SIPPs accounting for over 50% of traffic.

The not-for-profit fintech reports that comparison figures with 2016 show that, in the year, overall transfer volumes rose by 15%, overall transfer values increased 27%, and self-invested personal pensions (SIPPs) were the biggest beneficiary, seeing transfers in increase by 30% on 2016 and transfer values by 39%.

With more than 100 brands using the service – across the range of pension providers, administrators and platforms – the company says its data provides the most comprehensive insight available into transfer trends in the industry. The service carried out over half-a-million transfers during the year, worth £31bn, and the average transfer time through the automated service was 10 calendar days (including the BACS process).

Origo’s year-on-year data show how transfer volumes through the service have increased in the years since the pensions freedoms were announced:

Jan – Dec 2014: £17.3 billion

Jan – Dec 2015: £21.5 billion

Jan – Dec 2016: £24.3 billion

Jan – Dec 2017: £30.9 billion

The average payment amount in a pension-to-pension transfer was £57,400, up by 7% since 2015.

One reason for the rise in value, Origo said, was the growing number of transfers to SIPP providers, which tend to be higher value tickets.

SIPPs dominated the pension transfer market in 2017, according to Origo figures, accounting for 51% of all transfers in through the Options Transfers service.

Since 2014, when the Pensions Freedoms were first announced, volumes of transfers into SIPPs have almost doubled (98%) and values have more than doubled (121%).

Anthony Rafferty, Managing Director, Origo commented: “Origo’s Options Transfers service continues to prove its value to the industry, with increased volumes and values of transactions passing through the service year-on-year, while ensuring an average transfer time of 10 calendar days.

“As more and more people have sought to move their pension money where it can benefit from the greater flexibility offered under the new rules, so the volumes have risen. Transfers are likely to continue as more people reach the age at which they will want to consider transferring their pension to access the Freedoms. Our data shows that the average age for people transferring their pension is 53.

“SIPPs in particular have seen an influx of business, with an increase of 50% in transfers through the Options Transfers service since 2015 and a 67% increase in values in the same period.”

Rafferty added that with volumes continuing to rise, automation of transfer processes is essential.

In 2018, this will further extend to pensions re-registration, he says. “The upward trend of pensions re-registration is only going to continue. Re-registration offers many benefits to the consumer, including not having to liquidate assets (sell and re-buy) which could cause a taxable event, as well as keeping the consumer in the market.”

Rafferty says he expects transfer volumes to continue to grow in the year ahead. “As more innovative and flexible products are produced in order to meet customer demand, we expect to see more transfers taking place, both in terms of volumes and value of transfers and, in particular, a rise in re-registration of assets through the Options Transfers service.”

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